SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Amounts in thousands)



	Year Ended December 31,
	2014			2013			2012
REVENUES:
Net investment (loss) income	$	(125	)	$	1,316		$	1,459
Other income	8			229			204
Administrative service fees	477,440			464,393			478,037
Total revenues	477,323			465,938			479,700
EXPENSES:
General and administrative	524,751			431,354			470,156
Depreciation and amortization	28,207			36,185			30,408
Interest	31,376			33,589			35,112
Asset Impairment	88,528			—			—
Total expenses	672,862			501,128			535,676
Loss from operations before income taxes and equity in net income of subsidiaries	(195,539		)	(35,190		)	(55,976		)
Income tax benefit	53,011			13,014			5,633
Equity in net income (loss) of subsidiaries	288,157			192,302			172,406
Net income	$	145,629		$	170,126		$	122,063

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)



	Year Ended December 31,
	2014			2013			2012
Net income	$	145,629		$	170,126		$	122,063
Other comprehensive income before tax:
Unrealized gains (losses) on investments available-for-sale:
Unrealized holding gains (losses) arising during the period	59,073			(78,217		)	65,462
Less: Reclassification adjustments for gains included in earnings	(2,710		)	(23,975		)	(36,680		)
Unrealized gains (losses) on investments available-for-sale, net	56,363			(102,192		)	28,782
Defined benefit pension plans:
Prior service cost arising during the period	—			607			—
Net (loss) gain arising during the period	(11,893		)	7,294			(646		)
Less: Amortization of prior service cost and net loss included in net periodic pension cost	600			2,572			4,152
Defined benefit pension plans, net	(11,293		)	10,473			3,506
Other comprehensive income (loss), before tax	45,070			(91,719		)	32,288
Income tax expense (benefit) related to components of other comprehensive income	15,464			(31,868		)	21,936
Other comprehensive income (loss), net of tax	29,606			(59,851		)	10,352
Comprehensive income	$	175,235		$	110,275		$	132,415

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED BALANCE SHEETS

(Amounts in thousands)



	December 31, 2014			December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	61,212		$	131,350
Investments—available for sale	—			78,242
Other assets	36,740			30,965
Deferred taxes	11,538			16,158
Assets held for sale	50,000			—
Due from subsidiaries	128,967			177,957
Total current assets	288,457			434,672
Property and equipment, net	53,016			162,679
Goodwill	312,732			319,732
Other intangible assets, net	573			1,198
Investment in subsidiaries	3,060,191			2,608,631
Deferred taxes	36,453			6,523
Other assets	70,760			71,661
Total Assets	$	3,822,182		$	3,605,096
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Due to subsidiaries	$	284,654		$	237,555
Deferred taxes	34,684			—
Other liabilities	130,580			100,755
Total current liabilities	449,918			338,310
Intercompany notes payable—long term	1,047,947			977,233
Long term debt	499,504			499,300
Other liabilities	115,591			161,442
Total Liabilities	2,112,960			1,976,285
Commitments and contingencies
Stockholders’ Equity:
Common stock	153			150
Additional paid-in capital	1,444,705			1,377,624
Treasury common stock, at cost	(2,341,652		)	(2,179,744		)
Retained earnings	2,609,277			2,463,648
Accumulated other comprehensive income	(3,261		)	(32,867		)
Total Stockholders’ Equity	1,709,222			1,628,811
Total Liabilities and Stockholders’ Equity	$	3,822,182		$	3,605,096

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(Amounts in thousands)



	Year Ended December 31,
	2014			2013			2012
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES	$	153,063		$	111,385		$	165,141
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales on investments	81,263			6,060			—
Maturities of investments	1,512			877			—
Purchases of investments	(3,032		)	(6,841		)	—
Purchases of property and equipment	(62,491		)	(53,632		)	(68,116		)
Notes receivable due from subsidiaries	—			—			7,000
Capital contributions returned to Parent	—			2,300			1,500
Capital contributions to subsidiaries	(188,000		)	(7,500		)	(17,560		)
Sales (purchases) of restricted investments and other	—			161			876
Net cash used in investing activities	(170,748		)	(58,575		)	(76,300		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in checks outstanding, net of deposits	(46		)	5			(44		)
Excess tax benefit on share-based compensation	1,701			287			3,222
Net borrowings from subsidiaries	70,714			39,487			(9,103		)
Proceeds from exercise of stock options and employee stock purchases	27,727			10,762			16,941
Proceeds from issuance of notes and other financing arrangements	—			345,000			110,000
Repayment of debt under financing arrangements	—			(345,000		)	(122,500		)
Repurchase of common stock	(152,549		)	(77,810		)	(69,496		)
Net cash used in financing activities	(52,453		)	(27,269		)	(70,980		)
Net (decrease) increase in cash and cash equivalents	(70,138		)	25,541			17,861
Cash and cash equivalents, beginning of period	131,350			105,809			87,948
Cash and cash equivalents, end of period	$	61,212		$	131,350		$	105,809
SUPPLEMENTAL CASH FLOWS DISCLOSURE:
Interest paid	$	29,670		$	30,789		$	31,134
Income taxes paid	83,499			80,119			5,001

See accompanying notes to condensed financial statements.

SUPPLEMENTAL SCHEDULE I

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

(PARENT COMPANY ONLY)

HEALTH NET, INC.

NOTE TO CONDENSED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

Health Net, Inc.’s ("HNT") investment in subsidiaries is stated at cost plus equity in undistributed earnings (losses) of subsidiaries. HNT’s share of net income (loss) of its unconsolidated subsidiaries is included in consolidated income using the equity method.

This condensed financial information of registrant (parent company only) should be read in conjunction with the consolidated financial statements of Health Net, Inc. and subsidiaries.

Note 2—Subsidiary Transactions

Dividends from Subsidiaries

HNT received cash dividends from its subsidiaries in the amounts of $61,750,000, $46,519,000 and $140,000,000 during the years ended December 31, 2014, 2013 and 2012, respectively.